What to do if you are currently with a Composite or Managed Company.

[Mordac]

Prosperity4 are on our PSL along with 3 other umbrella companies, But all 4 on our PSL only run PAYE and no option of dividends.

Why do you need a PSL of umbrella co's? Surely your contractors can use whichever brolly (or limited) they choose? And remember, they are not "supplying" you or your agency with anything. They are "supplying" contractors with payroll services (of wildly varying quality). For you to be forcing, or pushing contractors towards one company over another is probably illegal, but certainly immoral. Let me guess, P4 offer the most, er, "generous incentives"?

[monkeygeorge]

The best option from a financial point of view is most certainly to open your own Limited Company.

This may well be sound advice, but shouldn't this be an impartial forum?

A worryingly large number of posts here are from SJD, Contractor Umbrella and the likes. They try to sound unbiased but obvioulsy this isn't the case.

Why are the moderators torelating this?

Actually, I wouldn't be surprised if there aren't any, given the amount of abuse certain members throw at others.

[monkeygeorge]

Bugger, this is what I've fallen for, I need to start a company asap, I did have one but fell for the "unlimited" expenses line.......

You've fallen for the spammers more like.

Why don't you wait till the legislation actually does come out instead of listening to all the speculation here.

There's no point jumping ship now is there. If you're that worried just stop claiming for subsistence.

[Cowboy Bob]

This may well be sound advice, but shouldn't this be an impartial forum?

It is impartial. The companies respected in the contractor community get no grief and those that aren't get slagged off. If SJD, ContractorUmbrella or the like had a track record of providing dodgy services, they'd get thoroughly mauled just like P4 do.

It's survival of the fittest, and that tells me a hell of a lot more about the various companies than anything they actually say themselves.

For the record, I have never used the services of any of the companies that have regular posters here.

[Cowboy Bob]

You've fallen for the spammers more like.

Why don't you wait till the legislation actually does come out instead of listening to all the speculation here.

There's no point jumping ship now is there. If you're that worried just stop claiming for subsistence.

Anyone who needs to know what a moron this guy is only needs to look at his posting history. It's blatently obvious that he works for one of the composite companies.

Scared about losing your job? Good luck getting a new one when your employer goes out of business and the only qualification you've got is a GNVQ in hair gel application...

[ChimpMaster]

Simon

You say that "Your take home pay using your own Limited Company is usually in excess of 80%"

I think it's important to note that this is only for low paid contractors who do not fall into the 40% bracket (or not by much). For contractors earning more I would believe that the take home pay is more like 65% because they then pay dividend tax at higher rate of 40%.

So someone on contract value of £50k will get a return of ~ 80%
Someone on contract value of £100k will get a return of 65% - 70%

Having said that, it's still better than PAYE.

Please enlighten me if I am missing something obvious here.


Thanks.

[monkeygeorge]

Anyone who needs to know what a moron this guy is only needs to look at his posting history. It's blatently obvious that he works for one of the composite companies.

Scared about losing your job? Good luck getting a new one when your employer goes out of business and the only qualification you've got is a GNVQ in hair gel application...

*** IDIOT ALERT ***

In the past year and a bit I've said good things about Giant, Safe Solutions, Contractor Umbrella and bad things about Orange Genie.

I've also asked for help in filling in my tax return.

If you can deduce from that, that I work for a composite then you are an idiot worthy of no respect.

As least the others now know who to add to their ignore list.

[monkeygeorge]

Simon

You say that "Your take home pay using your own Limited Company is usually in excess of 80%"

I think it's important to note that this is only for low paid contractors who do not fall into the 40% bracket (or not by much). For contractors earning more I would believe that the take home pay is more like 65% because they then pay dividend tax at higher rate of 40%.

So someone on contract value of £50k will get a return of ~ 80%
Someone on contract value of £100k will get a return of 65% - 70%

Having said that, it's still better than PAYE.

Please enlighten me if I am missing something obvious here.


Thanks.

I too would like to hear the answer to this because I may well be looking at (finally) forming my own company next April.

[ASB]

Simon

You say that "Your take home pay using your own Limited Company is usually in excess of 80%"

I think it's important to note that this is only for low paid contractors who do not fall into the 40% bracket (or not by much). For contractors earning more I would believe that the take home pay is more like 65% because they then pay dividend tax at higher rate of 40%.

So someone on contract value of £50k will get a return of ~ 80%
Someone on contract value of £100k will get a return of 65% - 70%

Having said that, it's still better than PAYE.

Please enlighten me if I am missing something obvious here.


Thanks.

There are ways, some of which may be appropriate for you, to improve things.

Essentially ensure outside IR35.

Ensure minor salary and dividends equate to the lower rate band (i.e. no 40%). If you're comfortable with the S660 implication ensure partner is topped up to the 40% limit.

Retain the excess in the company.

Wait 2 years (or possibly 3).

Liquidate company using ESC C16. [Payments are treated as a capital receipt, not income]

Take 75% taper relief. This gives approx 40k per shareholder with no further tax to pay.

Anything in excess of that will need CGT paying, so if there was 100k each this goes to 25k, less 9k allowance = 16k. CGT = 6.2k.

I don't know if this is how Simon would achieve it, I rather imagine he has tailored solutions based on the individual circumstance - but if you are prepared to defer income 80% + is achieveable even of high ish billings.

I suspect a *lot* of perople are uncomfortable with this approach, also if it's something you are going to want to do every few year the IR might get a bit interested.

I just did it with no problems.

There has been posting on this before - but it can be tricky to find.

HTH.

[YNWA]

No more Umbrella's?

Initially I thought these new laws would only outlaw Composite and Managed companies?

Bt reading through a few webistes, it looks like the end of Umbrella's (as we know them) as well.

No home to work cliams, no expense claims and no dispensation claims? Does this mean the Revenue will reverse or stop the dispensation's in place?